Undaunted by possible litigation to wrest Essar Steel: LN Mittal

Companies
25
0

DUNKIRK: World’s biggest steelmaker Lakshmi Mittal has waited four decades to bring his steel business to his home turf, and says he is undaunted by the possibility of a long drawn-out litigation process to wrest Essar Steel in a bidding battle in Indian courts.

Lakshmi Mittal, chairman, ArcelorMittal, did not reveal any disappointment with the twists and turns in the interpretation of the Indian Bankruptcy Code: “…the Indian IBC is intended to bring the country in line with international norms on bankruptcy protection, and if applied as originally designed, can have a very positive impact on both the country’s banking sector and foreign investor sentiment towards India,” he told ET.

Aditya Mittal, his son, the number two in Arcelor Mittal, who goes with three designations of President, Group CFO and CEO of ArcelorMittal Europe concured, with his chairman: “We are not a company to get tired by a long race.”

Mittal Junior had led a team to do the due diligence for Gujaratbased Essar Steel and Odisha-based Bhushan Steel, but ultimately surprised everyone by making a strong financial bid for only Essar Steel, which is said to be in the region of Rs. 35,000 crore, way ahead of its Russian rival VTB-led Numetal which was around Rs. 19,000 crore. Both companies are, however, struggling to establish their eligibility to bid for a stressed asset under India’s new bankruptcy code.

In an interaction with ET, as the resolution process for Essar Steel is listed for another hearing in the bankruptcy court and ArcelorMittal’s eligibility to make a bid is still under scrutiny, the Mittals seemed unfazed having weathered 50 acquisitions in the past to grow to its current size of a 95.5-million tonne steel producer.

“It is important that the process is adhered to and is seen to be transparent, with a consistent application of rules that were initially laid out. Any global investor in any territory would want to see the law applied in a similarly consistent fashion,” Mittal explained.

TWISTS TURNS

“What we are seeing is as you say some twists and turns which I believe relate to the fact that these are the first test cases for the new code and it will need some time to settle. It seems all the cases have their own complexities,” Mittal senior said. “Ultimately these will be ironed out and that the process will succeed with its fundamental aim which is to deliver a fair and attractive return for creditors and secure capable new owners for the assets in question. With that in mind, we are confident we have made a compelling offer for Essar with our partner Nippon.”

Citing his keen interest in getting an investment in steel-making in India, he said he has invested significantly in HMEL, a refinery in partnership with a state-owned undertaking.

“We can also contribute a lot to the steel industry, which will be an important component of growing India’s manufacturing capabilities which will be vital to support stronger economic growth,” Mittal said.

WHY ESSAR STEEL?


Aditya Mittal said they ultimately decided to focus on Essar Steel because they believed it is an excellent asset with good location and infrastructure and offered the potential to scale up considerably over the longer term.

“It would represent an important market entry point for ArcelorMittal into the Indian market,” he said.

Facebook Comments

Comments are closed.